PetroBakken Energy has entered into an agreement to sell certain non-core southeast Saskatchewan assets to Crescent Point Energy Corp. for gross cash proceeds of $427 million, subject to closing adjustments.

The Non-Core Assets are considered to be outside the key focus of our Bakken Business Unit as they are largely non-operated and generally have lower average working interest than our remaining lands. Proceeds from the Transaction will initially be used to further pay down our credit facility, leaving at least $1.1 billion in available borrowing capacity. As a result of this sale, we will be revising our capital plan and may increase spending in the second half of 2012, primarily in the Cardium area. We will provide revised guidance with respect to our 2012 expected capital spending and exit production levels in the near future.

The Bakken Business Unit will continue to represent a significant portion of our corporate asset base as this sale represents only 7% of the Business Unit's land holdings and approximately 12% of its production. Assuming successful completion of this Transaction, our average working interest in our remaining Bakken Business Unit lands will increase from 82% to 86% and we will continue to have over 700 net drilling locations in the Business Unit, representing approximately 10 years of drilling inventory.

TD Securities Inc. acted as financial advisor to PetroBakken on the Transaction.

The Transaction will have an effective date of January 1, 2012 and, subject to satisfaction of all conditions and receipt of required regulatory approvals, is expected to close in mid March, 2012.

Tags: PetroBakken Energy